Pretax profit rose to 1.15 billion pounds ($1.82 billion)
in the six months through September from 953 million pounds a
year earlier, in line with the 1.1 billion-pound median estimate
of four analysts surveyed by Bloomberg. Costs from Hurricane
Sandy last month probably won’t exceed 100 million pounds, the
company said today in a statement.

The company has increased investment in its U.S. power-transmission and gas-distribution businesses, while boosting
spending on U.K. networks to accommodate more generation from
low-carbon sources such as wind farms. The increase in regulated
controllable costs was kept to 3 percent as a U.S. cost-cutting
program helped to mitigate “inflationary pressures,” it said.

National Grid fell 0.3 percent to 692 pence in London
trading as of 10:54 a.m. local time.

Sandy Impact

Hurricane Sandy, which hit the U.S. and Caribbean in
October, cut power to about 1.1 million of National Grid’s Long
Island customers. Costs of as much as 100 million pounds, which
the company says were incurred outside its work with the local
power authority, probably won’t affect results until the next
half at the earliest, Deutsche Bank AG said in a note.

The utility forecast “another year of good operating and
financial performance.” Its outlook hinges on the result of an
audit by U.K. energy regulator Ofgem, which is reviewing prices
charged by the company’s power and gas grids. New price controls
will take effect in April and last eight years, compared with
past review periods of four to five years.

Initial proposals put forward in July were criticized by
National Grid, which said the prices wouldn’t be enough to spur
essential investment in infrastructure. A final decision is due
Dec. 17.

The London-based company submitted a “very comprehensive”
and “fair” response to Ofgem’s original proposals, Holliday
said today on a conference call, declining to comment on whether
he expects a more favorable outcome next month.

Final U.K. price-control proposals remain the “key” issue
for the company, Deutsche Bank said in the note. The bank said
in January it expects Ofgem to be “tougher than the market is
anticipating.”